HVP Magazine – Using Enterprise Resource Planning to Avoid Supply Chain Problems

Kevin Crowe, Principal Software Consultant at OGL Computer, explains how enterprise resource planning (ERP) can help plumbing and heating businesses.

The pandemic had already created many supply chain and logistics issues for businesses across all sectors over the past 18 months, but together with Brexit it has also created the perfect storm. A business that savvy heating, ventilation and plumbing companies have been able to overcome, often emerging stronger, thanks to IT and technology systems, especially those centered on ERP (Enterprise Resource Planning).

ERP systems support the integration of previously disparate business functions, which help companies adapt to new ways of working, such as online rather than through trade counters. Indeed, many HVAC companies have had to move their sales and trading online to stay in business during the pandemic.

The COVID-19 pandemic has caused major disruption to supply chains and logistics, particularly with price volatility and order fulfillment times, due to microchip shortages, which impact many many HVAC products, especially air conditioning systems, those with variable speed motors and compressors. Manufacturers have been subjected to microchip shipments missing or not showing up. This has created huge unmet demand issues and is expected to continue through 2022.

ERP is a technology solution that ensures companies have good visibility across the entire business during supply chain disruption because it combines all systems into one. By integrating information on purchasing, inventory, finance, sales and marketing, ERP offers the possibility of increasing efficiency, responsiveness and productivity. This helps businesses provide a better customer experience and fulfill as many orders as possible.

Supply chain issues are exacerbated as companies are unable to accurately forecast sales and inventory levels. To remedy this, transparency and visibility into a company’s supply chain and understanding any gaps is key, and that’s where ERP systems come in.

ERP has enabled the HVAC industry to enter prices direct from suppliers, for example, on online inventory, minimizing the risk of margin erosion and keeping customers up to date with pricing information, while avoiding wasting time continually contacting suppliers. for real-time pricing.

But not all HVAC companies are yet plugged into the benefits of ERP.

Our survey found that 81% of respondents in the heating, ventilation and plumbing industry agree that a central ERP system would give them much better inventory visibility and control. However, 34% of those surveyed also confirmed that they were concerned about the management disruption that such a move to ERP would cause. This perceived barrier to implementation is simple to mitigate with just a few key considerations.

First, review your company’s existing processes to see how they can be redesigned to increase efficiency, then choose the right ERP solution to meet current and future business strategies. For example, if you are an HVAC business planning to sell online, the technology you need must enable simple and seamless integrated e-commerce functionality to maximize sales.

Regularly reviewing and cleaning all business data – customer, supplier, and product – will help increase the chances of a smooth migration when you move to ERP. So take the time to do this and also schedule training for the managers of the various departments who will be using the ERP system the most so that they can use it without fear or abuse. Once these “super users” are comfortable with their training, they can even help train other staff members.

Perhaps the most important consideration, beyond selecting the ERP system itself, is ensuring that you choose a software vendor that provides support and will help your business achieve maximum return on investment.

ERP Benefits – Danfast Case Study

The effects of the pandemic and Brexit have led to increased interest and adoption of ERP solutions, as smaller teams have been able to process the same amount of work during the holiday period with cloud software.

Being web-based and hosted in the cloud, ERP solutions are easily accessible remotely, rather than needing dedicated servers, so anyone working from home can work as they would from the office or on the road. But, again, it is advisable to hire the services of a reputable IT partner to ensure proper ERP software integration and a robust level of cloud security.

Implementing an ERP can create new and better ways of working and can improve the customer experience. In fact, it can amount to nothing less than the digital transformation of a business. Such was the case with Danfast, a Hull-based supplier of plumbing, heating, electricity and general consumables, which used ERP to deploy a large-scale data recovery strategy when its offices were flooded.

The company lost all of its IT infrastructure but, thanks to ERP, was able to recover all aspects of its operational data and processes, from sales, purchasing, inventory management, marketing to CRM and accounting, with no negative impact on the business.

With ERP software, all of Danfast’s systems and data were replicated nightly to OGL’s maximum security offsite cloud data center. This allowed the company to get back into position to restart deliveries to customers a few days after the flood.

The ERP solution also provided Danfast with remote access to its data within 24 hours, which was very important to ensure the business did not have to shut down completely.

With the inherent benefits of digitalization in general and ERP systems in particular, now is the time to look ahead and ensure your business is fit to be a profitable business in 2022 and beyond. Whatever happens in the HVAC industry or if there are other global disruptions, ERP can help HVAC businesses of all sizes weather most storms.